NEW YORK (Reuters) – Foreclosure activity fell in April to its lowest level in more than six years, the latest sign the recovery in the housing market is on track, a report from RealtyTrac showed on Thursday.
Foreclosure activity – which includes default notices, scheduled auctions and bank repossessions – was seen on 144,790 properties last month, down 5 percent from March, and down 23 percent from a year earlier. It was the lowest level since February 2007.
The housing market has been a bright spot for the economy since the sector turned a corner last year, with prices rising, inventory tightening and low interest rates drawing in buyers.
There were also signs that some foreclosures that had been deferred were working their way through the process in states that use the court system to handle foreclosures, known as judicial states. There are 26 judicial or quasi-judicial foreclosure states, according to RealtyTrac.
“Foreclosure starts have been increasing for several months in many of the judicial states, and now that increased volume is showing up in the second stage of the process: the public foreclosure auction,” said Daren Blomquist, vice president at RealtyTrac.
Scheduled foreclosure auctions in judicial states rose 22 percent in April to their highest level since October 2010. Scheduled auctions in non-judicial states fell 7 percent.
Judicial states have seen the time it takes to foreclose increase compared to their counterparts, partly due to the intensive process and the large volume of cases the courts have to handle.
Overall, fewer properties started the foreclosure process, falling 4 percent to 70,133, while lenders repossessed 34,997 homes, a drop of 20 percent.
Nevada had the highest foreclosure rate for a second month in a row, with a foreclosure filing on one in every 360 homes. That is more than twice the national average of one in every 905 homes.
As of the beginning of May, 11.3 million homeowners were seriously underwater, meaning the mortgage was worth at least 25 percent more than the home. That accounts for 26 percent of mortgages, though it was down from 12.8 million homeowners in May last year.
(Reporting by Leah Schnurr- Editing by Nick Zieminski)